“”Despite the hype about the iPhone in the media over the last couple of weeks, the product has only been available for the last 10 days,” said Zipperstein. ” The jury is still out and we will have to see how the market reacts.””

Right. So if Verizon released a phone that sold a million in 10 days, you wouldn’t be peeing your pants, giggling like a little school girl and counting your stock options.

I agree with Mac Daily News on this one, what jury is Steve talking about? OJ’s?

Meanwhile, Jim Balsillie, co-CEO of Research In Motion Ltd., shrugs off the iPhone after being asked if anyone at RIM had managed to get one:

“”I haven’t seen one,” he volunteered with a shrug of his shoulders and a bored expression.”It’s possible, I guess. I mean, you watch these things, but you really have to just focus and do your job.””

And yet, being bored and unworried about the iPhone has not stopped him from warning us all of how dangerous it is:

“He is also intensely critical of what appears to be an effort by Apple to wrest control of the customer experience in the consumer market. For example, the iPhone is being sold through Apple’s own stores, instead of strictly through AT&T Inc…. The phone is free of AT&T’s logo and software and is tied closely to Apple’s iTunes music store,”

Having the AT&T logo in the info bar isn’t enough? It certainly makes it clear whose signal you’re using, which is what AT&T is providing. Customers are not served well by not having a glued-on AT&T emblem? If carriers want their logo on the phone, let them make the hardware.

Selling through Apple’s store is a problem? Can you possibly be serious? Having your phone sold in the most successful retail outlet in history is somehow a bad thing? A store that makes demo phones fully available on WiFi for customers to feel, touch, and use is a problem? Allowing the customer to activate it at home so your sales staff isn’t bothered with that mundane task is somehow an issue? Wow.

Being tied to Apple’s iTunes is a problem as well? Um, what? The dock-and-sync Apple has brilliantly perfected over the years — that hundreds of millions of people already know how to use — is a selling point, Jim, not a drawback.

So this is apparently the crux of the matter to Jim:

“”It’s a dangerous strategy,” says Balsillie. “It’s a tremendous amount of control. And the more control of the platform that goes out of the carrier, the more they shift into a commodity pipe.””

You don’t think cell service is something of a commodity already? How bad would it be if hardware makers made great hardware unshackled from the unreasonable constraints of carriers who want to sell us $2 ring tones, $3 songs, $15 crappy games and large monthly fees for streamed videos even though we already have those things on our PCs?

I’ve got a great idea. Why not have the carriers worry about their primary reason for existence: the signal? Quit the other crap and deploy faster and stronger signals to more places. They could make their money on $80+ monthly voice/data plans that customers actually feel provide their money’s worth, instead of building proprietary networks and ‘services’ to peddle a bunch of stuff we have or could get elsewhere if they didn’t cripple our phone so much.

Jim is pandering to the carriers here. No wonder he’s ‘co-CEO,’ I wouldn’t want him running the whole show. It seems RIM is successful despite his brilliance.

Related

5 thoughts on “iPhone competitors visit a river in Egypt.”

Good thoughts. Yes, Microsoft’s experiments with hardware have not been successful. Sure, keyboards and mice are fine but that doesn’t mean much. Xbox and Zune are losing them billions between them.

As for how the mobile companies will compete with OS X, the answer is they won’t anytime soon. This is what Jobs meant when he said the iPhone was five years ahead of anyone else. It’s also why they must rely on FUD and other “arguments” against the iPhone (the disinformation from “analysts” and IT groups is running rampant). After all, it worked well enough for Microsoft that they were able to finally build an alternative to Mac OS in ’95.

If the phone companies had any brains, they’d make their phones at least drag and drop with non-DRM MP3 and AAC compatibility so people could put the music they already own on the device. No, it wouldn’t be as slick as iTunes, but they’re likely not capable of that anyway. Instead, they cling doggedly to the idea that they should isolate you from what you already have, and insist you buy it from their proprietary networks at jacked up prices. The fact is they don’t have to get into the media business, just let me use what I have.

Of course, Microsoft is insanely profitable. But only in software (and simple hardware, mice & keyboards). Mass market software often has margins of 90 percent or more, so it is profitable at just about any volume.

But hardware is different. While selling lots of low profit devices is good for many reasons, cash flow and purchasing power especially, I believe volume flows down from the high end in consumer electronics (iPod -> mini (then Nano)-> shuffle). All of the phone providers are losing the volume, and thus profit, drivers to Apple. As Apple release cheaper (and probably simpler) devices the number of customers in the price range will increase at the cost of someone else. Nokia et. al. will be relegated to the low profit high volume commodity market, and find it hard to break out.

How will the mobile phone companies compete with a device whose software spans from the iPhone to the low end server market? There are now three sources (server, desktop & phone) of income for, essentially, one OS code base and associated software.

Is each of the current phone manufacturers going to create the rest of the stuff Apple has, like the iTunes store? Do the deals with the media companies? The phone manufactures are not vertically integrated behemoths like Apple who leverage major infrastructure across multiple platforms. (uggh, yeah, full of weasel words, but I hope it concisely makes the point).

I agree about Nokia’s statement. But there is nothing wrong with wanting a large piece of a low-end pie as opposed to a small piece of a high-end one. Ultimately it’s about profits, and both approaches, if done well, will bring in money.

While I tend to prefer the high-end strategy, it’s not as if Microsoft’s Windows-on-every-desktop strategy was “wrong” (though I question their methods), and it certainly wasn’t unsuccessful.

Nokia’s statement shows they have fallen into the Microsoft trap, volume above all else, “big numbers”. Apple doesn’t want 40% of the market, they want the most profitable 1-5%. Nokia will apparently be happy making 20 times the number of phones as Apple but getting less profit. Nokia, Microsoft and most of the companies in the industry think like this. See Dell for another example.

The Blackberry (in my opinion) is only sucessful because it has no real competition and is a great frontend/backend for exchange server – even though it’s a proprietary implementation on top of a proprietary implementation.

Nokia has made the best (and most honest) statement in my mind:

The iPhone will definitely shake up the North American market; $500 to $600 per device will help establish a new pricing paradigm. Consumers will now start to equate price with the physical handset. That’s good. I personally think the iPhone will be very good for the industry because competition is good and always stimulates new ideas. But we should also remember the scale of the ambition Apple has set itself: they are talking about getting one share point of a billion devices per year. Nokia is focused on winning 40 percent of this market.”